Mizuho eyes merger of units
By Taiga Uranaka and Taro Fuse |
May 19, 2011, Thursday
|
Print Edition
Print Edition
MIZUHO Financial Group is planning to merge its retail and corporate banking arms in the wake of a computer failure that disrupted transactions following Japan's earthquake in March, two sources with knowledge of the matter said.
The merger, which it hopes to complete in 2013, would also be aimed at streamlining operations at the banking group, which was created by a merger of three banks about a decade ago but has been slow to integrate management from the former entities, which critics say has resulted in a "two-bank system" emblematic of the group's bloated structure.
Yoshinobu Yamada, a senior analyst at Deutsche Securities, said Mizuho could save about 38 billion yen (US$468 million) annually if its commercial banking units' cost ratio came down to that of Bank of Tokyo-Mitsubishi UFJ.
"If the organizational restructuring leads to boosting revenue and improving group risk management, the profit increase (as the result of the merger) could be larger," he said in a note.
Despite its assertion on unity, Mizuho has long been seen to be still effectively divided by the former entities, with the three camps evenly sharing the top posts of the holding company and two commercial bank units.
Especially, the two-bank structure is seen hampering a clear chain of command and better risk management, regarded as one of the factors in the system problems.
"It's waste on a grand scale," a top executive at a rival bank once said.
The merger, which it hopes to complete in 2013, would also be aimed at streamlining operations at the banking group, which was created by a merger of three banks about a decade ago but has been slow to integrate management from the former entities, which critics say has resulted in a "two-bank system" emblematic of the group's bloated structure.
Yoshinobu Yamada, a senior analyst at Deutsche Securities, said Mizuho could save about 38 billion yen (US$468 million) annually if its commercial banking units' cost ratio came down to that of Bank of Tokyo-Mitsubishi UFJ.
"If the organizational restructuring leads to boosting revenue and improving group risk management, the profit increase (as the result of the merger) could be larger," he said in a note.
Despite its assertion on unity, Mizuho has long been seen to be still effectively divided by the former entities, with the three camps evenly sharing the top posts of the holding company and two commercial bank units.
Especially, the two-bank structure is seen hampering a clear chain of command and better risk management, regarded as one of the factors in the system problems.
"It's waste on a grand scale," a top executive at a rival bank once said.
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